Council buys £9m Welwyn Garden City office block

South Somerset District Council has added a £9m office block in Welwyn Garden City to its growing property portfolio.

The council has revealed it has bought the Alchemy building for £9.7m, reflecting a net initial yield of 7%.

According to the council, the property offers 38,880 square feet of ‘contemporary office accommodation and Grade A specification to its high-profile tenants’ and is considered as ‘one of the best’ in Welwyn Garden City.

The property, which is only half a mile from Welwyn Garden City station and 30 minutes from King’s Cross, is occupied by many well-known tenants, including the Environment Agency and Deutsche Telekom (T Mobile).

The building also neighbours the headquarters for retail giant, Tesco.

‘This is an important investment for the council, with a high-quality building and tenants in an area where we can expect to see rental growth,’ said the council’s portfolio holder for commercial strategy, Cllr John Clark.

‘The substantial income from this property will go a long way to securing local public services.’

In September, South Somerset District Council bought the Glastonbury branch of B&Q for £4.4m, reflecting a net initial yield of 7.19%.

It came just weeks after the local authority bought the UK distribution hub of toy giant Hasbro in Newport for £2.78m.

The council’s property portfolio also includes a business park in Christchurch, which was bought for £7.05m and the Bell House office block in Milton Keynes, which cost £2.92m.

In a statement, the council said its commercial property team is working to make sure it does not overpay for property.

‘A huge and diverse range of opportunities have been considered and rejected in the past year from a car showroom in Newcastle to an industrial estate in Poole,’ the statement added.

‘Reasons for rejection can include the asking price not matching our valuation, unacceptable risk to income, non-compliance with our commercial aims and objectives, and over-exposure to a particular market.’

Photo Credit – Jo_Johnston (Pixabay)